Several months ago, PaymentEye covered a new e-commerce company that had the potential of challenging Amazon. At this stage, the company in question, Jet.com, had raised $220m and signed up 1,600 retailers as partners before even selling a single product.
Ideas that it could one day rival or even take down the e-commerce giant were quickly dismissed, with some people pointing out that Amazon’s brand was too strong and asking how Jet.com would find a way to make more money by offering a service similar to Amazon.
As we approach 2015’s expiry date, the company is already worth $1b and has just finished another investment round where it raised $500m led by Fidelity Investments, according to a source close to the matter. The new round will mean Jet.com will be valued at $1.5 billion.
The company’s premise is fairly straight-forward: it will try to sell products online at the lowest possible prices. It offers consumers unique ways of saving money, be it from discounts for paying with a debit card to algorithms that reduce the cost of your shopping cart when you add more items (i.e. due to the minimization of number of shipments).
Originally, the company charged a $49.99 annual subscription, but it discarded the fee after several months.
For the month of September, the company’s total sales hit $20m, according to a source close to the company. It surpassed its October target of $30.5m by 11 per cent, selling $33.2m worth of items instead. Its repeat buyers grew by 62 per cent in October and new buyers jumped by a quarter.
The founder of Jet, Marc Lore, already has a history with Amazon, and its not exactly a friendly one. His earlier ventures such as Diapers.com were being outsold and outpriced by Amazon. His Quidsi company was squeezed by Amazon to the point where he conceded defeat and sold it to the commerce giant for $550m (not a bad silver lining).
It will be interesting to see how Jet.com copes with its first holiday season.
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